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US consumer confidence jumps in May

Orders for long-lasting US manufactured goods unexpectedly rose in April and consumer confidence perked up in May, supporting views of a rebound in economic growth.

Other data on Tuesday showed home prices moving higher in March and services industries, which dominate the economy, growing at a fast clip in May.

"It appears that the economy continues to bounce back from the harsh winter," said John Ryding, chief economist at RDQ Economics in New York.

Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, climbed 0.8 per cent last month after an upwardly revised 3.6 per cent gain in March, the Commerce Department said.

While non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 per cent, the March reading on these so-called core capital goods was revised sharply higher to show a 4.7 per cent gain - the largest since November.

"The large upward revision hints at a stronger handoff into the second quarter," said Gennadiy Goldberg, an economist at TD Securities in New York. "The data is indicative of a pickup in capital investment activity during the spring."

Separately, the Conference Board said its index of consumer attitudes rose to 83 in May from 81.7 in April as households' labor market views improved. Rising household optimism should boost consumer spending, which accounts for more than two-thirds of US economic activity.

HOUSE PRICES RISE

Another report showed house prices continued to appreciate in March. The pace, however, is moderating. That could help the market, where rising prices and mortgage rates have undercut sales. The Standard & Poor's/CaseShiller gauge of prices in 20 metropolitan areas rose 12.4 per cent in March from a year ago.

The reports helped to lift US stocks and push the Standard & Poor's 500 index to a record high. Prices for US Treasury debt fell. The dollar was flat against a basket of currencies.

Core capital goods shipments, which are used to calculate equipment spending in the government's GDP measurement, fell 0.4 per cent last month after rising 2.1 per cent in March.

At the same time, durable goods inventories rose only 0.1 per cent, suggesting little inventory growth in the second quarter. Morgan Stanley lowered its second-quarter growth estimate to an annual pace of 3.7 per cent from 3.9 per cent.

Orders for defense capital goods jumped 39.3 per cent, the largest rise since December 2012, and unfilled orders rose solidly, a sign factory activity will continue to push ahead.